On the right truck

In simpler times, cars were cars, vans were vans and trucks were trucks. But in these days of "crossover" craze and sport-ute sensation, everything else that can’t be called cars are collectively heaped on the "trucks" tag. Sport-utes big and small, vans of whatever sort, AUVs and pickups – everything. And trucks, by this definition, are the hottest (read; most profitable) thing in the vehicle manufacturing industry today.

In a world of dwindling car sales, trucks remain favorites year after year after year. According to local manufacturers’ figures, in 1995 there were 71,185 cars sold compared to 56,967 trucks, or what are formally referred to in the local industry as commercial vehicles. In contrast, last year only 23,684 new cars drove off the manufacturers’ showroom floors, while there were 52,987 new trucks that rolled out the factory doors. This year alone, trucks already take a full 73-percent slice in the combined cars and trucks sales pie.

While car sales may never be the same again, business is sizzling for local truck manufacturers these days. Not exactly, the Truck Manufacturers Association is quick to say, though.

According to the TMA, this isn’t exactly the case, no thanks to the current practice of importation and sale of used trucks by independent parties.

The existence of this type of business is readily apparent. Dealerships selling imported used trucks are sprouting in every neighborhood, becoming as ubiquitous as those sago shake parlors that were so popular a while back.

The TMA points out the disparity in new vehicle registrations compared against total vehicle sales as proof that the imported used-truck market is encroaching on the manufacturers’ take.

Taking figures released by the TMA, the official industry vehicle sales in both 2000 and 2001 point to a significant difference when compared with new vehicle registrations for the same period. In 2000 when manufacturers sold only 83,994 vehicles, 172,051 new registrations were recorded. Last year vehicle sales dropped to 73,671 but the new vehicle registration tally actually posted a one-percent growth, up to 173,695.

Whatever the case, the popularity of these imported vehicles can only be attributed to one thing: They’re cheap. Priced at about half of what a new, locally built truck cost, and at times even cheaper than the used, local counterparts.

In a speech, TMA chairman Frank Nacua raised several issues against this business. One is that this practice creates a negative impact not just to a manufacturer’s business, but to all those involve in the vehicle building process.

Nacua also pointed out that the government is losing revenue due to the shrinking brand-new vehicle market, which means lesser taxes going to official coffers.

Then there are the issues on these imported vehicles’ safety and emissions standards. The TMA questions these vehicles’ construction, which it perceives may be compromised by shoddy workmanship on the conversion from right-hand drive to left-hand drive layout, thus raising concerns on its roadworthiness.

The issue of after-sales service for these vehicles is a concern consumers should consider, Nacua added. He said there is a possibility of high maintenance costs that may be the result of uncertain parts availability and supply, and added servicing expenses. "Besides, they do not have anybody to run after in case something goes wrong in their vehicles," Nacua said.

But the strongest argument the TMA has against the used-truck business is that it is in violation of certain laws. One is prohibiting the importation, sale and registration of right-hand drive vehicles in the country. Another is going against a memorandum order in the guidelines of the Motor Vehicle Development Program, which allows only the importation of brand new CBU passenger cars, commercial vehicles and motorcycles. In this regard, the TMA is pointing its finger at the government to enforce its own laws.

Tough luck then, if it’s the government the industry is relying on. In the TMA’s view, however, it’s the only way to ensure the truck industry will be in for the long haul.